SUSTAINABLE DEVELOPMENTS
PUBLISHED BY THE INTERNATIONAL INSTITUTE FOR
SUSTAINABLE DEVELOPMENT (IISD)
THIS VOLUME OF SUSTAINABLE DEVELOPMENTS IS PUBLISHED
IN COOPERATION WITH THE INTERNATIONAL CENTRE FOR TRADE
AND SUSTAINABLE DEVELOPMENT (ICTSD)
WRITTEN AND EDITED BY:
Aaron Cosbey
Peter Doran
Clare Lim
Kira Schmidt
Lynn Wagner
ELECTRONIC PUBLISHING
Rod Araneda
MANAGING EDITOR
Langston James Goree VI "Kimo"
Vol. 3 No. 1
9 December 1996
WTO MINISTERIAL CONFERENCE
9-13 DECEMBER 1996
The World Trade Organization's (WTO) first Ministerial Conference (MC) will
meet in Singapore from 9-13 December 1996. Delegates will take stock of the
operation of the rule-based multilateral trading system, address issues
regarding implementation and determine the future course of activities of the
WTO. Reports from 26 WTO bodies, which were approved by the General Council in
November, are expected to be adopted. Members worked up until the eve of the
MC in an informal process on a draft Ministerial Declaration (MD). A report
has been forwarded to the Chair of the MC outlining the draft and highlighting
points of contention to be discussed during the MC. Differences remain in a
number of areas including textiles and agriculture, and new issues including
investment, competition policy, labor and government procurement. Delegations
also have discussed an Information Technology Agreement that is expected to be
agreed at the MC.
THE ORIGINS OF THE WTO
The WTO was established on 1 January 1995. It is the successor to the General
Agreement on Tariffs and Trade (GATT) and is the institutional embodiment of
the results of the Uruguay Round of negotiations conducted by the GATT
Contracting Parties from 1986-1994. The WTO objectives are: predictable and
growing access to markets; promotion of fair competition; and encouragement of
development and economic reform. As of December 1996, 126 countries are WTO
Members. Twenty-eight countries are in the process of joining.
SUSTAINABLE DEVELOPMENT-RELATED ISSUES
Many of the issues to be discussed at the MC are directly or indirectly
related to environment and sustainable development, including agriculture,
textiles, investment and labor. Consideration of these issues has been based,
in most cases on discussion in various WTO bodies. The following sections
highlight the relevant committee discussions and identify related text in the
29 November version of the draft MD.
TRADE AND ENVIRONMENT: The Committee on Trade and Environment's (CTE) work
programme included ten agenda items. The Committee considered Items 1 (trade
measures for environmental purposes, including those pursuant to multilateral
environmental agreements (MEAs)) and 5 (dispute settlement mechanisms in MEAs
and the multilateral trading system) together. Discussions centered on the
application of unilateral trade measures to address environmental problems
occurring extrajurisdictionally and on consistency between MEAs and the WTO.
The report: recommends that the WTO continue to cooperate with MEA
Secretariats; calls for favorable consideration of MEAs' requests for observer
status; and suggests that if a dispute arises between WTO Members or Parties
to an MEA over the use of trade measures pursuant to the MEA, they should
consider resolving it through the dispute settlement mechanisms of the MEA.
Members were unable to reach consensus on how to deal with disputes brought
against Parties to an MEA by non-Parties.
A major portion of the CTE's work thus far has focused on Item 3(b)
(environmental requirements relating to products, including standards and
technical regulations, packaging, labelling and recycling). These discussions
have focused on voluntary eco-labelling schemes and their relationship to the
WTO Agreement on Technical Barriers to Trade (TBT), in particular those that
attempt to address process and production methods. The Committee concluded
that increased transparency in the development and operation of schemes can
help alleviate trade concerns regarding eco-labelling and can ensure provision
of accurate information to consumers and recommended further work and
cooperation with the TBT Committee and relevant international fora.
On Item 4 (transparency of trade measures used for environmental purposes and
trade-related environmental measures (TREMs)), the CTE recommended that: no
modifications of WTO rules are necessary to ensure adequate transparency for
existing TREMs, although the CTE should monitor the adequacy of existing
transparency provisions; and the WTO Secretariat should compile a database of
all notifications of TREMs.
Discussions on Item 6 (effect of environmental measures on market access,
especially in relation to developing countries, and environmental benefits of
removing trade restrictions and distortions) centered on how the WTO can
contribute to making international trade and environmental policies mutually
supportive through trade liberalization. The CTE recommended that discussion
on this issue be broadened to include sectors other than agriculture.
On Item 7 (exports of domestically prohibited goods (DPGs)), the Committee
recommended: that the Secretariat determine what information is available on
restrictions or bans on domestic sales or use of exported products; and
provision of technical assistance to strengthen developing countries' capacity
to monitor and, where necessary, control imports of DPGs.
The Committee's consideration of Item 8 (Trade-Related Aspects of Intellectual
Property Rights (TRIPs) and the environment) focused on the ability of the
TRIPs Agreement to facilitate the generation of, access to and transfer of
environmentally-sound technology and products (EST&Ps), environmentally-
unsound technologies, and IPR and indigenous knowledge provisions of the
Convention on Biological Diversity. The report recommended further work on
developing an appreciation of the relationship of TRIPs to environmental
protection and sustainable development.
On Item 10 (appropriate arrangements for relations with NGOs and transparency
of documentation), the Committee: encouraged Members to derestrict all papers
and non-papers submitted to the CTE; recommended that the Secretariat continue
to interact with NGOs; and called for favorable consideration of MEA
Secretariats' requests for observer status to WTO bodies as appropriate.
The CTE conducted preliminary discussions on Items 2 (the relationship between
environmental policies relevant to trade and environmental measures with
significant trade effects), 3(a) (environ-mental taxes and charges) and 9
(services and the environment) and concluded that further examination of these
issues is required.
The report recommends that the CTE continue to operate beyond its original two
year mandate. The draft MD highlights the importance of policy coordination at
the national level in the area of trade and environment. It states that due to
the breadth and complexity of the issues covered by the Committee, further
work is required on all items of its agenda.
TRADE AND DEVELOPMENT: The Committee on Trade and Development (CTD) identified
four priorities. Regarding the implementation of provisions in favor of
developing countries, there was concern as to whether developing countries
have been drawing full benefits from such provisions when they are adopted.
Considerable priority was attached to drafting guidelines for WTO technical
cooperation with a focus on capacity-building. Member States drew divergent
conclusions from a CTD report on why some developing countries have done
better than others in integrating into the multilateral trading system. Some
stressed domestic restraints, others pointed to trade barriers. Technical
cooperation was recommended for LDCs unable to take advantage of initiatives
in trade and investment.
Particular attention was given to the deteriorating economic situation facing
LDCs. The report recommended technical cooperation aimed at institutional and
human capacity-building and a WTO Plan of Action. The General Council was also
asked to invite Ministers in Singapore to convene a high-level meeting with
UNCTAD and the International Trade Centre. The future work programme of the
CTD will, inter alia, explore ways of ensuring greater disclosure of the
application of the Uruguay Round provisions in favor of developing and least-
developed countries.
The draft MD highlights: the adoption of Guidelines for Technical Cooperation;
the need to increase awareness of special provisions for developing countries;
and the adoption of the Plan of Action. It also calls for the high-level
meeting in Geneva in 1997.
TEXTILES: The Council for Trade in Goods discussed the implementation of the
Agreement on Textiles and Clothing (ATC) and related matters. The discussion
was based on written contributions by Pakistan on behalf of the ASEAN Members
of the WTO. Key issues included: integration programmes; use of transitional
safeguards; bilaterally agreed arrangements; functioning of the Textiles
Monitoring Body (TMB); treatment of small suppliers and least developed
countries; interests of cotton-producing countries; rules of origin; use of
trade measures for non-trade purposes; market access; rules and disciplines;
and circumvention. Some Members expressed concern that the first stage of
integration had not meaningfully improved access to the markets of certain
importing Members. Views diverged regarding recommendations.
The Council also considered the TMB report. Some Members stated that the TMB
was supposed to rely on additional and supplementary information, and in
certain cases had not done so. The Council annexed the TMB report to their
report to the General Council and agreed to take action regarding three TMB
recommendations: recall the importance of adhering to ATC notification
requirements; resume consultations regarding the ad personam status of TMB's
members at an appropriate time; and give consideration to the TMB schedule in
the WTO's overall schedule of meetings.
The draft MD resolves to ensure faithful implementation of all aspects of the
ATC. Members agree that the TMB should achieve greater transparency in
providing the rationale for its findings and recommendations and emphasize the
responsibility of the Goods Council in overseeing the functioning of the ATC.
AGRICULTURE: The Report of the Committee on Trade in Agriculture addresses
implementation of the Agreement on Trade in Agriculture and the notification
procedures specified in the Agreement. While the report expresses general
satisfaction with the notification performance of most Members, the attached
annex highlights some problems. For example, a third of the countries required
to notify on their domestic support measures have done so, and notifications
on export subsidies are at 36%.
The Committee recommends continued work to explore "the scope for further
improving the quality of implementation generally and to developing guidelines
or other solutions as appropriate." Dissatisfaction with the manner in which
some countries have implemented the Uruguay Round commitments has led to the
inclusion of a reference to agriculture in draft MD, in a discussion of
implementation.
INVESTMENT: One of the most contentious of the new issues being considered for
the WTO agenda is investment. The OECD is in the process of drafting a
Multilateral Agreement on Investment (MAI) that protects the rights of foreign
investors in various ways and sets up a dispute settlement mechanism. It is
based on core trade principles that, for example, accord similar treatment to
foreign and national investors. Some countries would like to see a similar
agreement concluded in the broader WTO forum and have called for a working
group to examine the relationship between trade and investment.
A number of non-OECD countries object, fearing that the end result will be the
negotiation of a binding agreement whose final shape will have been
substantially determined in a forum to which they had no input. Many also
object on substantive grounds, arguing that restrictions on the terms of
investment are a necessary tool for development. Some of those opposed have
called for a moratorium on the discussion of investment issues in the WTO
until UNCTAD has completed its work on the subject.
The draft MD calls for establishment of a WTO working group that, after
examining the relationship between trade and investment, would report to the
General Council.
LABOR: Whether and how the WTO might address labor issues is another divisive
issue facing delegates in Singapore. Those who want mention of labor in the MD
want to strengthen international observance of "core" labor standards such as
rights of association and collective bargaining, and the prohibition of child
labor, forced labor and discrimination in employment, all the subjects of
International Labor Organization (ILO) Conventions. Those who oppose bringing
labor into the WTO Agenda feel that the issue should be left to the ILO. Many
fear that such standards will be used as a new form of protectionism.
The draft MD sets out an approach on which there is still no consensus. It
envisions an undefined mode of cooperation between the WTO and the ILO "to see
that the positive effects of trade liberalization on job creation and labor
standards are more clearly understood and seen to be mutually supportive." It
includes a prescription against the use of trade restrictive measures to
enforce such standards.
Some would like to see the WTO establish a Working Party to deal with the
issue. A number of countries have no objections to the current formulation,
which does not mention a Working Party. Others are opposed to including any
mention of labor in the Declaration.
THINGS TO LOOK FOR TODAY
PLENARY: The Plenary will meet during the morning and afternoon in the Suntec
Centre.
Sustainable Developments is a publication of the International
Institute for Sustainable Development (IISD)
, publishers of the Earth
Negotiations Bulletin (c). This volume of Sustainable
Developments, published at the Singapore WTO Ministerial
Conference to report on the environment and development policy
aspects of the meeting, is produced in cooperation with the
International Centre for Trade and Sustainable Development
(ICTSD). This issue of Sustainable Developments is written and
edited by Aaron Cosbey , Peter Doran
, Kira Schmidt and Lynn
Wagner . Electronic publishing by Rod Araneda
. The Managing Editor of Sustainable
Developments is Langston James "Kimo" Goree VI .
Funding for coverage of this meeting has been provided by ICTSD,
the Norwegian Ministry of Environment, the Danish Ministry of
Foreign Affairs and the Swedish Ministry of Environment. The
authors can be contacted during the WTO Ministerial Conference at
their electronic mail addresses and at tel: +65 7376888 Room 1726
and by fax at +65 7371072. IISD can be contacted at 161 Portage
Avenue East, 6th Floor, Winnipeg, Manitoba R3B 0Y4, Canada; tel:
+1-204-958-7700; fax: +1-204-958-7710. The opinions expressed in
Sustainable Developments are those of the authors and do not
necessarily reflect the views of IISD, ITCSD and other funders.
Excerpts from the Sustainable Developments may be used in other
publications only with appropriate academic citation. Electronic
versions of Sustainable Developments are automatically sent to e-
mail distribution lists (ASCII and PDF format) and can be found
in hypertext through the Linkages WWW-server at
http://www.iisd.ca/ on the Internet. For further
information on Sustainable Developments, including requests to
provide reporting services, contact the Managing Editor at
.
The Sustainable Developments may not be reproduced,
reprinted or posted to any system without specific permission
from the International Institute for Sustainable Development.
This limitation includes distribution via Usenet News, bulletin
board systems, mailing lists, print media and broadcast. For more
information, send a message to the Managing Editor at
.